Report | United States Industrial Outlook - Q1 2016
Net absorption was higher than new construction deliveries in the first quarter of 2016. This caused the U.S. vacancy rate to drop 10 basis points from year-end 2015 and - after 24-straight quarters of net absorption gains - vacancy is now at a 16-year low. Quality space options remain limited in many of the nation's markets and new construction leasing in facilities built in or after 2014 comprised 78% of overall net absorption activity during the quarter.
Even though the U.S. is in a "slower growth" economy, leading indicators that favor warehouse space, such as increasing retail sales, moderate home sales growth and a low unemployment rate are healthy. Leasing activity is anticipated to be steady in 2016, and more spec development will likely cause U.S. vacancy to hover in the low-6's through year-end. Warehouse asking rents will increase for the 6th-straight year, with 4.5% in annual growth expected by year-end 2016.
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